Wednesday, June 28, 2017

Coins seem to be the one form of money nobody wants. They're heavy and not worth much. Many people have a jar or a piggy bank or some sort of container they throw spare change in each day. I use an old acrylic fish tank I got back when I was in college, like this one:

For years, every day, when I got home, I would throw all my change into it. I never managed to fill it, which was probably a good thing. The fullest I ever got it was about 25% and that sucker was heavy! I could barely lift it with that many coins in it. If I ever managed to fill it completely, I never would have been able to get it out of the house!

A Penny Here, A Penny There...

The great thing about doing this is that all that change adds up. When the tank was about a quarter full, those coins would be worth somewhere around $250 to $350! And it was like free money! I just threw in a few coins here and there that I never missed each day. After a couple of months, BAM!! Jackpot!

In fact, when I was newly married, my wife and I routinely used our coin fund for gambling money when we went to Vegas.

It takes a lot longer for me to save up change these days because I rarely pay with cash. Instead, I charge everything so I can earn cash back rewards on my credit cards.

Even Banks Don't Seem To Want Coins

There have been a lot of other changes that make saving coins a bit more of a hassle than it used to be. Many banks no longer accept coins unless you have sorted and rolled them yourself before bringing them in. Few banks have coin counting machines these days and, if you bring in a bunch that are not rolled, they may have to ship them elsewhere to get counted. And, of course, they will likely charge you a coin counting fee.

Back when I worked for a credit union, we had a branch that had a coin counting machine in the lobby that our members could use for free. Eventually, that was done away with because it didn't get much use and the maintenance on the machine was too much.

Enter Coinstar

But there are still a lot of coin-hoarders out there and where there is a need, there is a business opportunity. Coinstar saw that need and filled it.

I'm sure you've seen their machines in grocery stores - big green kiosks with a touchscreen and a metal tray to pour your coins into. It's self-service, which I like, and grocery stores are open for more hours than banks are, so it's easier to find time to cash in your change.

When you use a Coinstar machine, you have three options on what to do with your money: you can get cash, get an e-gift card for one of many online retailers, or donate the money to one of several charities.

Option 1: Cash

Getting cash is the most expensive option. Coinstar charges 11.9% to exchange your coins for dollar bills. Probably some of this goes to the hosting grocery store, because the machine doesn't actually dispense cash. You get a receipt, which you then have to take to a checkout register or service desk at the store to redeem for cash. This is a pricey option and I never use it. I would suggest you avoid it as well.

Option 2: eGift Cards

The e-gift card is the option I always choose. If you go this route, there is no service charge and you get 100% of the value of your coins converted into a gift card for one of many online stores. I always choose Amazon because I buy a lot of stuff from them in my day-to-day life. (Is there anyone who doesn't?)

Option 3: Donate To Charity

I have never used the charity option, but Coinstar does provide you with a receipt and your donation is tax deductible. I do not know if there is a service charge if you choose to donate your funds.

Today, I cashed in the small amount of change I had accumulated. It was only $58.45 and that was after close to a year of saving. (I told you I don't use cash much anymore!) I converted that to an Amazon gift card to avoid the service fee, saving me about $7. I then transferred that same amount from my bank to my Tesla fund.

Coinstar And Its Like Are Affecting The U.S. Mint!

There is a ton of money just sitting out there in jars and couches. In fact, Coinstar has been so successful in getting people to turn in their piles of coins and get them back into circulation, that the Government Accounting Office has determined that the U.S. Mint has been able to reduce the number of coins it produces!

Coin recycling machines found in grocery stores, retail stores, and some depository institutions have made it easier now than it was in the past for the public to trade in coins for currency or some form of credit, such as a gift card. In some districts, coin recycling has returned large volumes of coins to circulation.

In fact, that same report says the number of coins returned to circulation from services like Coinstar increased from $1 billion in 2000 to $2.6 billion in 2006.

Wednesday, June 21, 2017

There are two things I really, really hate – painting and moving. I will happily fork over piles of cash for someone else to do those jobs for me. So in preparation for our move to Washington, I called up a couple moving companies to get quotes for the move. I asked for the works – not only moving our stuff, but packing everything up as well. We were able to afford this little extravagance because my wife’s job offer included a rather generous relocation allowance. When you relocate for a job, moving expenses are tax deductible, so this this means we can pay for the move with tax-free money that was basically given to us from my wife’s new employer.

Trick Number One

I’ve heard all kinds of horror stories about moving companies. People’s stuff gets lost or damaged. Or the movers show up at the new house and demand thousands of dollars more before unloading your stuff.

It’s that last thing I want to talk about. It happens because people unknowingly agree to it.

How Your Cost Is Determined

Moving prices are based on two factors – distance moved and weight of items moved. The distance is fairly straightforward and easy to determine. Weight, however, is a different story. When the movers send someone out to your house to give you a quote, that person walks through the house, looking at all your stuff. He or she makes an estimate of how much all that stuff weighs and that is used to come up with a price. But you need to be careful.

Not All Estimates Are Equal

See, there are two types of estimates movers can give you: binding and non-binding. As the names imply, a binding estimate is one that the mover must adhere too. They may charge you less, but they cannot charge you more. A non-binding estimate is exactly that – a general amount that may not end up anywhere close to what you will eventually be asked to pay. Unless you specify which type of estimate you want, guess which one you’re likely to get?

My Experiment

Because I write a personal finance blog, I thought this would be a good opportunity to run a little experiment. When I got my two quotes, I asked one company (Company A) for a binding estimate. When I spoke with the other company (Company B), I played dumb and did not specify which type I wanted. Company B did not tell me I had two options for the estimate. Both companies sent someone out to look at my house in person. They came on the same day, about 4 hours apart, so the contents of my house were definitely the same for both estimates.

Company A’s quote, the binding estimate, came in at about $15,000. Company B’s quote came in at $10,000. Wow! Company B is 33% cheaper! I should go with them, right?

Wrong. Look at the small print in the estimate:

Click to enlarge

If that’s too small for your to read, here’s the important bit: “The Non-Binding Estimate shows the estimated cost… The total cannot be determined until all of the packing and origin services have been performed, … the van loaded and the actual weight of the shipment has been determined.”

You might as well just hand them your wallet. That paragraph gives them a license to steal. It’d would be so easy for them to claim that the person giving the quote did not correctly estimate the weight of the shipment or the amount of work it would take to pack everything up. It’s so easy to fib here and there to come up with a low-ball quote to get your business, then sock you with a huge bill when they deliver all your stuff. And if they did that, there would be nothing you could do about it. Their estimate says they can do that.

Compare that to the language of the binding estimate:

Click to enlarge

No wiggle room there. You will pay the estimated amount or less. (I seriously doubt anyone ever will pay less…)

Trick Number Two

Another little trick they use to come up with a lower quote is with insurance. When you pack and move stuff, things sometimes break. It happens. To provide some protection, all movers offer some sort of insurance. There are typically two types – full replacement value, which will reimburse you for the amount it takes to replace something that’s broken, and flat rate, per pound coverage. The former is more expensive. The latter is cheap. So cheap, in fact, it’s usually offered for free. You know why? Because they typically reimburse you at 60 cents per pound!

Think about that. Your brand new, $1,500 washing machine gets damaged? Well, those typically weigh between 150 and 200 pounds, so the most the mover will have to pay you if that gets damaged is $120. Your collection of rare stamps got damaged? Sorry, Those are pretty light, so you’ll probably be lucky to get $5.00.

Again, unless you specifically ask, guess which one will be included in your quote?

Look again at the language of the binding estimate. When you get a binding estimate, that default insurance coverage jumps from $0.60 per pound to $6.00 per pound. That still might not be enough to cover the full replacement cost, but it’s better than 60 cents per pound! About 10 times better, I’d say.

Be Sure You Are Comparing Like Estimates

I wanted to make sure I was comparing apples to apples with these estimates, so I called up Company B again and asked for a binding quote with a specified amount of insurance coverage. When I got that quote back, their price went up to around $15,000, just like the other company.

Think about that. Their estimate increased by 50% when they knew they would be forced to abide by it! If that doesn’t tell you the first estimate was a bait-and-switch, I don’t know what would. Is it any wonder people get mad at moving companies?

So get educated and know your options and your rights. Read the fine print. Save yourself from nasty surprises!

Wednesday, June 14, 2017

Father's Day is coming up. I'm a father. Therefore, I will likely be getting gifts - from my daughter and my parents. Not my wife though. She knows me too well.

I don't want gifts. I've got enough stuff. I don't even want a card. Have you seen card prices lately? They're $5, $7, some even reaching as high as $10! For something that will sit on a shelf or desk for a couple of days or a week tops, then get tossed out. That's crazy!

If you want to let me know you are thinking of me, don't send a card. Send a text or an email. The effect is the same, the delivery is instant, and the cost is nothing.

There are exceptions to the no gift rule, of course. Anything homemade is welcome. Something that took work to create is infinitely more cherished than something store-bought. My daughter will likely make me a Father's Day card rather than buy one from a store. Awesome. That will be saved far longer and appreciated far more than a store bought card would.

But no gifts, please. Unless you have a crystal ball and know exactly the make and model of something I want, odds are I'm going to return it, re-gift it, sell it, or give it away to charity. Let's just save everyone time and money and avoid all that, OK?

What Happened?

Somewhere along the line, gift giving transformed from trying to find and buy something you might think a person would enjoy, to asking that person for a list of things they want and picking something off that. What's the point? How is that thoughtful? That's no different than grocery shopping.

What I do want is time. Time with family and friends. Let's go out for a meal or get together at home and just hang out. Let's give each other something that money can't buy.

Not Everyone Feels This Way

I know someone people just don't feel right not exchanging gifts on a holiday. I get that. I know it's hard to change years of tradition. To be sure, sometimes gift giving is still appropriate. Kids should get gifts. Christmas is still gift giving time (although restraint is the order of the day there). Major life events like weddings or graduations call for gifts. But other times? Not so much.

I'm 48 years old. I don't need a gift for Father's Day. Or Valentine's Day. Or my birthday. If you really think about it, you probably don't either.